Most companies underestimate their inventory holding costs by 30–50%. This calculator reveals the true annual cost of carrying your stock, and quantifies your dead stock exposure in PKR.
Calculate your annual inventory carrying cost and quantify the PKR exposure from dead and slow-moving stock sitting in your warehouses.
Inventory holding cost, also called carrying cost, is the total annual expense of keeping stock in your warehouses. Most operations managers only track the purchase cost of inventory and miss the significant ongoing cost of holding it. In Pakistan's industrial and SME context, holding costs typically run 20–35% of inventory value per year.
Holding cost includes: storage rent and utilities (typically 4–8%), capital cost or opportunity cost of funds tied up (8–15%), insurance (0.5–2%), handling and labour (2–5%), obsolescence and spoilage risk (2–6%), and stock shrinkage (0.5–2%). Add these up and you quickly reach 25% or more of inventory value annually.
Dead stock, items with no movement in 12+ months, represents capital that is permanently at risk. In Pakistan's SME sector, dead stock percentages of 10–25% are common due to poor demand forecasting, over-purchasing, and inadequate inventory reviews. Safe Chain Solver's client engagements have recovered PKR 18M+ from a single utility sector dead stock elimination programme.